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Thread: Jittery developers go low-rise on confidence

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    Default Jittery developers go low-rise on confidence

    http://www.businesstimes.com.sg/sub/...10689,00.html?

    Published October 29, 2010

    Jittery developers go low-rise on confidence

    34% expect prices of new launches to fall; some fear more cooling measures

    By KALPANA RASHIWALA


    (SINGAPORE) The worst- kept secret in the property market is out in the open. Not only are developers less upbeat about the future but a third of them actually expect prices of new homes to decline. And market performance for the suburban residential sector may be the worst hit.

    This dose of pessimism was reflected in the latest readings of Real Estate Sentiment Index (RESI) put out by the developers body and NUS.

    In the wake of the Aug 30 cooling measures, some 34 per cent of developers polled for Q3 expect prices for new residential launches to decline, albeit by less than 10 per cent, over the next six months. None of the developers surveyed in Q1 and Q2 had predicted price drops.

    Just 44 per cent expect more new residential units to be launched over the next half year, down from 68 per cent in the previous quarter.

    The sentiment indices slipped below the psychologically significant mark of 5 in Q3, indicating respondents were less upbeat in the quarter and expect more uncertain market conditions over the next six months.

    The consensus as indicated by net balances is generally weaker.

    Polled on how the suburban residential sector would perform, the net balance in Q3 was -43 per cent. This means that most expect the sector to perform worse over the next six months. In Q2, this net balance was +27 per cent, hinting at better future performance.

    'The strong historical price growth in the sector is not likely to be sustained moving forward. Downward adjustment to the price growth, if it occurs in the next few months, will ease some pressure on the affordability level of mass-market residential properties in suburban areas,' said Associate Professor Sing Tien Foo of NUS.

    The net balance for the future market performance of the prime residential sector, while still in positive territory, has also been declining significantly, from +54 per cent in Q1 to +32 per cent in Q2 and +3 per cent in Q3.

    About 70 per cent of the developer respondents in the latest survey were concerned that the government could intervene to dampen the property market further.

    They also cited other factors that could hurt sentiment over the next six months. The concerns included a slowdown in the global economy (cited by 60 per cent), an increase in the supply of development land (53 per cent), too many new property launches (49 per cent), rising interest rates (47 per cent) and tightening financing/liquidity in the debt market (40 per cent).

    Eighty-four per cent of all survey respondents consider it likely and very likely that there will be a further increase in the supply of development land over the next six months. An even higher proportion, 90 per cent, of respondents expect the government to further boost the supply of Build-to-Order and Design, Build and Sell Scheme public housing flats as well as executive condo (EC) units.

    Recent government steps to cool the market are expected to have most impact on the HDB resale and mass private housing market segments. About 76 and 64 per cent respectively of survey respondents rated their impact on these two market segments over the next six months as significant. Conversely, the measures are expected to have the least impact on the high-end/luxury segment with 64 per cent predicting minimal impact. For the mid-end private housing segment, 79 per cent foresee only moderate impact.

    Real Estate Developers' Association of Singapore and NUS' Department of Real Estate polled slightly over 70 respondents for their latest Q3 survey, similar to the size for the Q1 and Q2 surveys.

    The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 5.8 in Q2 to 4.8 in Q3.

    The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 5.9 in Q2 to 4.8 in Q3. As a result, the Composite Sentiment Index (the average of the two indices), also declined to 4.8. The index ranges from 0 to 10 with a score below 5 indicating deteriorating market conditions.

    Redas CEO Steven Choo said: 'The RESI was able to track closely the immediate impact the cooling measures has on sentiments in the property sector.'

    Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'The findings are not surprising. Just look at the amount of land government has been releasing and the supply of new HDB flats and ECs they're planning, plus the demand-side measures. People have put on their thinking caps to figure out how they'll be affected, whether they are HDB upgraders, buying a second/investment property, or even downgrading.

    'The latest survey results are a clear signal to government that the measures are having an impact,' he added.

    Separately, the NUS' Institute of Real Estate Studies yesterday released its monthly Singapore Residential Price Index tracking prices of completed non-landed private homes. The overall index rose one per cent month on month in September, slightly slower than the 1.1 per cent increase in August.

    NUS' sub-index for Central region, which covers a basket of properties in districts 1-4 and 9-11, increased 0.6 per cent in September, the same pace as in August. The sub-index for Non-Central region appreciated 1.4 per cent in September, slightly slower than the 1.6 per cent gain posted in August.

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    http://www.straitstimes.com/Money/St...ry_596606.html

    Oct 29, 2010

    Property firms less upbeat with market set to cool

    Sentiment index for the next six months drops slightly following Govt's recent curbs

    By Harsha Jethnani


    PROPERTY companies are less optimistic about market conditions in the next six months, following the Government's introduction of cooling measures in August.

    According to the third-quarter Real Estate Sentiment Index (Resi), the future sentiment index - which gauges sentiment about the next six months - dropped to 4.8 from 5.9 in the second quarter of the year.

    Released yesterday, the quarterly questionnaire survey developed by the Real Estate Developers' Association of Singapore (Redas) and the National University of Singapore's Department of Real Estate (NUS DRE) polled 71 Redas members, of which 61 per cent were developers.

    Although slightly less upbeat, developers did not expect the market to weaken significantly over the next six months, the survey found.

    But fewer of them expected more new residential units to be launched in the next six months - 44 per cent as compared to 68 per cent in the second quarter of this year.

    On prices, those questioned suggest levels will moderate over the coming months.

    More than half - 54 per cent - anticipated residential prices remaining unchanged over the next two quarters, and 34 per cent saw them becoming moderately lower. Just 12 per cent thought they would rise, compared to 51 per cent when the survey was last conducted in June.

    In a statement released yesterday, Associate Professor Sing Tien Foo of the NUS Department of Real Estate said 'the strong historical price growth is not likely to be sustained moving forward'.

    Resi's composite sentiment index - an indicator of overall market sentiment - also dropped to 4.8 from 5.9, indicating that respondents were less upbeat and expected more uncertain market conditions over the near term.

    The survey found that respondents were negative about prospects for the suburban residential market, expecting it to perform less well over the next six months.

    The sector had a 'net balance percentage' of minus 43 per cent.

    This figure indicates the overall direction of change in sentiment according to the Resi report.

    Some 76 per cent of respondents anticipated that recent government measures would have a significant impact on the HDB resale market over the next half-year, and 65 per cent thought they would hit mass-market private housing. About 45 per cent of developers did not expect to see a change in the level of interest in government land sale (GLS) sites and collective sales, but 47 per cent thought interest for government land sale sites would reduce over the next six months, compared to 24 per cent in the last quarter.

    About 33 per cent of developers anticipate less interest in collective sales, compared to 15 per cent in the previous quarter.

    Redas chief executive Steven Choo said the divergent views reflected short-term uncertainty about market movements, 'but by and large, the development industry is expected to stay on course to meet demand in the housing market'.

    [email protected]

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    this is healthy for the market in the long term.

    govt not stupid. they want high property prices but they also want it to be stable and "real", not just a bubble.

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    Wink simple logic

    Excuse me how big is singapore huh? Can supply be controlled from long term perspective huh? So long spore is not going downhill permanently, with limited and quantifiable supply of land, property prices will have an upward bias in the long run. For those with sufficient wealth to do asset allocation, property should be included.


    Quote Originally Posted by Lord Anus
    this is healthy for the market in the long term.

    govt not stupid. they want high property prices but they also want it to be stable and "real", not just a bubble.

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    Quote Originally Posted by nobrainer32007
    Excuse me how big is singapore huh? Can supply be controlled from long term perspective huh? So long spore is not going downhill permanently, with limited and quantifiable supply of land, property prices will have an upward bias in the long run. For those with sufficient wealth to do asset allocation, property should be included.
    This assumes population/resident growth. With Singaporeans complaining about immigration/FT etc & record low birth rates - supply will outstrip demand.

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    suburban residential -43% over next 6 months which includes HDBs.... wow wow.

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    Simple minded. Period.

    Quote Originally Posted by gfoo
    This assumes population/resident growth. With Singaporeans complaining about immigration/FT etc & record low birth rates - supply will outstrip demand.

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